Accounts at a defunct Lithuanian bank were used to route money to a network of offshore entities linked to Russian President Vladimir Putin, media reported on April 5.
The fact that the cash travelled through the Baltics is no great shock. The region's banking systems have long been a favourite channel for questionable funds orginating in the CIS. However, Lithuania has done much in recent years to clamp down; Latvia insists it is trying.
The offshore network, apparently held by Putin’s friend Sergey Rodulgin, were uncovered by the International Consortium of Investigative Journalists (ICIJ) in the Panama Papers on April 3. Based on a massive leak of documents from Panamanian law firm Mossack Fonseca, the ICIJ has leaked details about a network of offshore companies through which Putin – as well as a number of other world leaders, their relatives, and tens of thousands of companies – allegedly routed money for purposes of tax evasion or laundering. The Rodulgin-related network is said to have routed $2bn (€1.76bn) with the help of Mossack Fonseca.
The Lithuanian Financial Crime Investigation Service (FNTT) suspects that “significant money flows had passed from four Lithuanian bank accounts held by offshore entities to the Roldugin network,” according to 15.lt, which is a partner in the ICIJ.
The accounts were run at Ukio Bankas, a bank that was named in connection to several other seedy operations, including the Sergei Magnitsky case, before it went bankrupt in 2013. Main stakeholder Vladimir Romanov fled Lithuania and was granted asylum in Russia in 2014. Lithuania seeks to extradite Romanov for "large-scale embezzlement". It has been claimed that the rogue banker is being protected in Moscow by people connected to Ramzan Kadyrov, the powerful president of Chechnya, behind whom stands Putin.
According to the Panama Papers material, money paid out from Ukio Bankas came from four offshore companies: Dino Capital in Panama, Starcourt Worldwide in Belize, as well as Delco Networks and Kentway in the British Virgin Islands. The deals concerned trading shares in Russian oil and gas firm Rosneft.
At least two of the deals, conducted in 2010, were attempts to launder money, the Lithuanian force suspects. “Days after the deals were concluded, they were cancelled with the sellers obliged to compensate the Roldugin network for “losses” of over [$1.5mn],” the OCCRP reports.
There were “signs of money laundering in these operations,” FNTT head Kestutis Jucevicius said, while pointing out that his force is no longer able to react. “The money didn’t stay in Lithuania. Lithuania was sort of a transit country," he noted.
Some accounts belonging to the four offshore entities were closed as early as 2009, 15min.lt reports, however, others still exist exist at Siauliu Bankas, which took over the rump of Ukios Bankas in 2013 following a rapid response by Lithuanian regulators to the problems at Ukios. The remaining accounts have almost never been used since Ukios went out of business, Jucevicius reports.